A program to provide NT$30 billion (US$926.33 million) in annual rent subsidies for low and middle-income households, which is estimated to benefit 500,000 households, is to continue next year, a government official said last week. While it is good that President William Lai (賴清德) continues to focus on the housing needs of low-income households, for that assistance to be effective the government needs to revise the rules for accessing social housing or subsidy programs.
In a Taipei Times article published last year (“Social housing and next year’s election,” July 17 last year, page 13), columnist Michael Turton wrote that many Taiwanese cannot obtain social housing benefits as they do not “fall below the 50th percentile of income in their area.” Due to a shortage of social housing units, applicants must also try their luck in a lottery system, he wrote.
This is the same dilemma faced by low-to-medium-income families seeking to access the scarce slots available in public daycare and kindergarten services.
Taipei Department of Social Welfare data showed that 39,665 people from 20,518 households — who account for 1.58 percent of the city’s population — are considered low-income. During the tenure of former Taipei mayor Ko Wen-je (柯文哲), he oversaw the completion of 20,000 social-housing units, although that was well below the 50,000 he initially proposed.
However, even those with average incomes struggle to rent a home large enough for a family in Taipei. Statistics Web site Numbeo says that the average monthly rent for a three-bedroom apartment in the city is more than NT$50,000. The Central News Agency reported on Nov. 29 last year that the average salary for an office worker in Taipei was NT$694,000, which works out to NT$57,833 per month.
Those who opt to purchase a house would not be any better off, assuming that the average new apartment in Taipei costs NT$50 million, with a 30-year mortgage at a 3 percent interest rate.
Exceptionally high housing costs, coupled with disproportionately low wages, are the reason most young couples in Taiwan opt not to have children, leading to a rapidly falling birthrate that several officials have termed a national security crisis.
If Lai wants to get serious about addressing the low birthrate, he must aggressively tackle the housing crisis. He must set loftier goals than Ko did, and make affordable housing available at a lower threshold. The government cannot mandate that companies raise wages, but it could offer tax incentives for those that do. It can also increase the availability of social housing and public daycare.
Most young workers in Taiwan make nowhere near that average monthly income of NT$57,833, and for those making below the average, rental units large enough for a family are even further out of reach. Nine percent of respondents in a survey by non-governmental organization the Taiwan Social Welfare League said they believe they live in poverty, while 7.8 percent said they believe they live in near-poverty, Taiwan News reported on Sept. 25 last year.
Further exacerbating the problem is many of the extant residential buildings in Taipei and elsewhere in the country were built “during the housing boom of the 50s and 60s [and] are reaching the end of their lives,” Turton wrote. “These units are often without elevators and inhabited by the elderly.”
The buildings do not have elevators, because they are not required to, as they have five or fewer floors. To replace these aging buildings — many of which are susceptible to toppling in a major earthquake — the government could construct buildings with a mix of apartments and low-cost social-housing units.
Lai is smart to take on housing, but he must not hold back in tackling the issue. Anything less than a major overhaul of social housing would be too little, too late.
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